If an application is submitted for Medicaid Category 3 or the CT Home Care Program for Elders (which is Medicaid paying for home care versus nursing home care) then the Department of Social Services gets to review five years work of the bank records, to see where money has gone. Despite rumors, it is only five years and that is not expected to change. Any gifts, or otherwise unexplainable cash transfers, within the five years are totalled up and divided by the average monthly cost of care. That average is set by the State, and not unique to each individual. The total gifts divided by the average cost of care equals the amount of time that the money could have paid for care. Since Medicaid should not have been needed for that amount of time, they then assess a penalty for that amount of time. The application is approved, but Medicaid will not pay for anything until those amount of days/months/years have passed. Very often an intentional penalty can be a way to protect assets. Transfers to a spouse, a minor child, a disabled or legally blind child, or a caregiver child have exceptions to this rule. For example, anything can be given to a spouse at any time without consequences from Medicaid.